FXStreet (Mumbai) - The US dollar jumped back on the bids in Asia, although remained off new twelve year peaks, as markets remain on the back foot ahead of the key ECB interest rate decision. Among the Asia-pac currencies, the Kiwi was the biggest gainer while the Aussie reversed early losses and now trades in the green beyond 0.73 handle. While the USD/JPY pair regained momentum and heads towards 123.50 levels. Key headlines in Asia Fed's Williams on the wires - mixing up sentiment Australia’s Oct trade deficit widens worse than estimates China’s Caixin services PMI unexpectedly drops in Nov Dominating themes in Asia - centered on JPY, AUD, NZD The calm before the ECB storm’ appeared to emerge the main theme in Asia, with the majors trading within limited range in anticipation of huge volatility stirred by the ECB decision. While dust settled over Yellen’s comments overnight and traders once gear up for more Yellen in the day ahead. On the FX front, the sentiment around the greenback remained lifted amid optimistic remarks from Yellen and solid US ADP jobs data. The Fed Chair Yellen commented on Wednesday that the US economic outlook has improved than previously seen and that the Fed remains on track for a rate lift-off this month with the focus now on Friday’s NFP report, the last one before FOMC decision on Dec 16. As a result, the USD/JPY pair halted its correction and regained momentum in Asia, once again heading for a retest of two-week highs reached at 123.67 yesterday. The major now trades firmer near 123.50 amid improving sentiment on the Asian indices. While both Antipodes attempt tepid-bounce after previous losses, with the Aussie shrugging off weak Aus trade and China services PMI data and rises 0.05% to trade at 0.7315 levels. Australia’s trade deficit widens to A$3.31 billion in October, compared to a revised $2.40 billion in Sept, missing forecasts of a $2.60 billion shortfall. The Kiwi on the other hand, tracked the recovery in the oil prices and gains 0.21% to 0.6652, hovering around the hourly 50-SMA. On the equities space, Asian indices are trading mixed to cautious ahead of ECB decision and Yellen’s testimony. Japan’s benchmark, the Nikkei pares losses and trades muted around 19,936 while Australia’s S&P ASX index drops -0.40% to 5,236. The mainland China’s benchmark, the Shanghai Composite rises 0.59% to 3,557, while China’s A50 index gains 0.35% to 10,767 points. Hong Kong’s Hang Seng loses -0.30% to 22,412. Heading into Europe & the US Today’s EUR calendar is expected to emerge extremely eventful, with the much awaited ECB monetary policy decision to steal the show. On the data front, a series of final services PMI will be reported from the Euro area economies along with the Euro land’s retail trade data. Eurozone's retail sales in October are expected to rise 0.2 % against -0.1% recorded in Sept. While the services sector activity from the UK is also lined up for release. The UK services PMI in November is seen ticking up to 55.0 from the 54.9 booked previously. ECB: More ‘Stimulus’ on the way Ashraf Laidi founder of AshrafLaidi.com believes, “Broad expectations are that the ECB will increase QE by 10-20 billion per month for at least another six months. They will also lower the deposit rate by 10-20 basis points. What's interesting is that any move on the deposit rate will be delivered in the ECB statement while a QE announcement wouldn't come until Draghi's press conference. If the deposit rate cut is larger than expected, the subsequent drop in the euro may prove to be the only opportunity to sell because the QE number could be a disappointment 90 minutes later. But then comes Yellen's testimony and Friday's NFP, which will likely limit any bounce for the single currency.” More Yellen ahead In the North American session, the US ISM non-manufacturing index and factory orders data are expected to have limited impact on the markets. While Fed Chair Yellen’s testimony before the Joint Economic Committee, in Washington, is expected to grab a lot of attention and spark renewed USD rally. EUR/USD Technicals Valeria Bednarik, Chief Analyst at FXStreet explained, “The pair has been trading in quite a limited range ever since the week started, ahead of the upcoming major events, and the technical picture is neutral-to-bearish, as the 4 hours chart shows that the price is struggling around a horizontal 20 SMA, while the technical indicators are seeking for direction around their mid-lines. A break below 1.0550, with additional easing coming from the ECB, can open doors for a retest of the year low at 1.0460 this Thursday, with chances of fresh lows afterwards, should US employment data beat expectations.” For more information, read our latest forex news.